global securities services division corporate actions · 2020-01-28 · the bank of...

The Bank of Tokyo-Mitsubishi, Ltd. Global Securities Services Division

CCoorrppoorraattee AAccttiioonnss

1

r rr c

r

1. Dividend Payment............................................................................................. 2

2. Interest Payment............................................................................................... 5

3. Redemption........................................................................................................... 7

4. Bonus Issue........................................................................................................... 8

5. Stock Split ............................................................................................................10

6. Rights Issue .........................................................................................................11

7. Allotment of New Share Subscription Rights ....................................13

8. Merger/Share T ansfe /Share Exchange..............................................16

9. Tender Offers (Take Ove Bid & Buyba k Offer) .............................19

10. Proxy Voting......................................................................................................21

11. [Appendix] Simplified Merge / Simplified Share Exchange.........23

October 2004 The outlined herein are our ordinary procedures for corporate action events in Japan. Please note the actual procedures may differ in each case.



2

1. Dividend Payment Dividend payment is distribution of cash to the shareholders out of the company’s current or retained earnings in proportion to their equity holding. Usually paid twice in a year. Final dividends are paid upon the approval of shareholders’ meeting (please see the Note) and interim dividends are paid upon the resolution of board meeting (if an effective date is specified regarding the resolution, that effective date). Entitlement: Eligibility for the entitlement is fixed on the record date. The owner of the shares must re-register the securities prior to the record date. For shares held in JASDEC, the Beneficial Shareholders List will be compiled by the custodian based on the balance of holdings as of the record date. It is the market practice to process all entitlements on an actual settlement basis. Accordingly, in case of a settlement failure over the record date, the claim is to be dealt with between the trade counterparties. Tax: Tax on dividend is withheld at source. According to the revision of the tax law that took effect on 1 April 2003, the rates of income tax on the dividends of listed shares (including the shares traded in JASDAQ over-the-counter market, Exchange Traded Funds (ETF), Real Estate Investment Trust (REIT) and Nikkei 300) are scheduled as follows: (Income Tax) From 1 April 2003 to 31 December 2003: 10% From 1 January 2004 to 31 March 2008: 7%

From 1 April 2008: 15% For “resident individual” beneficiaries, the local tax is also withheld as follows (please see the explanation below for details). Resident corporations and any type of non-resident beneficiaries are not subject to the local tax: (Local Tax) From 1 April 2003 to 31 December 2003: None

From 1 January 2004 to 31 March 2008: 3% From 1 April 2008: 5%

The above periods are applicable to the date of the AGM. For interim dividends, date of the board meeting or the payment date as the case maybe. The revision of the tax law is not applied to the following shares. Hence, the applicable



3

- Any shares owned by an individual shareholder (both non-resident and resident) for 5 % or more of the number of the outstanding shares

statutory rate is 20%. The mitigated rate under the double taxation treaty is 15% in most cases.

- Non-listed shares

Procedures for paying Local Tax: The local tax is paid to the prefecture where the individual shareholder resides by way of withholding the tax at the registrars. In order to execute such tax payment, the registrars require BTM to report the breakdown of the number of shares held by resident individuals per residing prefecture, immediately after record date. Consequently, unless accounts per residing prefecture of resident individuals or accounts per beneficial owner have been established, BTM hereby requests our clients to submit the breakdown of the number of shares held by resident individuals per their residing prefecture, no later than 3 business days after each record date of dividends. Unless such breakdowns are submitted, BTM will recognize that the accounts do not comprise resident individual shareholders. Procedures for application of double taxation treaties: In accordance with the applicable double taxation treaty, non-residents are able to enjoy the reduced income tax rate on dividends. BTM as custodian sends the application form for the reduced income tax rate to the issuer (via their agent) who in turn submits it to the local tax office prior to the payment date. With the implementation of the revised tax law in April 2003, the statutory income tax rate on dividends of listed shares (7%) is currently lower than the most common treaty rate (15%). Accordingly, it is normally not necessary to apply the treaty tax rate for dividends of listed shares (please see below). New double taxation treaty between Japan and the United States: The new double taxation treaty between Japan and the United States implemented on 1 July 2004 stipulates mitigated 10% income tax rate on dividends in general and other benefits such as a tax exemption for pension funds. In order to apply for the application of this favorable tax treaty, however, applicants are required to submit documents on eligibility to the tax office, which include a certificate of residency (Form6166).



4

Chronology: Model schedule of Dividend Payment

Key dates Example Note BTM Record Date 31 Mar 2003 Board Meeting/ Dividend Announcement

26 May 2003 Normally around 2 months after R/D

MT564 (DVCA)

Annual General Meeting 26 Jun 2003 To be held within 3 months after R/D

Payment Date 27 Jun 2003 Normally next business day of AGM

MT566

Record Date(interim) 30 Sep 2003 Board Meeting/ Interim Dividend Announcement

22 Nov 2003 MT564

Payment Date(Interim) 10 Dec 2003 MT566 (Note) Companies that have adopted the “Company-with-Committees” system (by changing the article of incorporation) may pay the dividends before the shareholders meeting. Under this system, which was introduced on 1st April, 2003 by the revision of the Commercial Code, proposals for appropriation of earnings have only to be approved by the board of directors and the approval by the shareholders meeting is not required. Below is the sample of the dividend payment by a company with the committees system. Record Date: 20 February 2004 Meeting of Board of Directors: 7 April 2004 Dividend Payment Date: 19 April 2004 Payment is made one

month earlier Shareholders Meeting Date: 19 May 2004 (Dividend Payment (conventional)): (20 May 2004) It is expected that the number of the companies with the committees system will increase which bring forward the dividend payment. Furthermore, the proposals for strengthening the power of board of directors of all companies, which are included in the working draft of the corporate law presented by the ministry of Justice in October 2003 may implicate more flexible dividend payment in future (e.g. quarterly payment instead of semi-annually).



5

2. Interest Payment Interest payment is payment of income generated by bonds, notes, bills or other fixed income instruments according to the interest rate. Entitlement: Eligibility for the entitlement is fixed at the closing of the days below, which are the last business days before the registration (book transfer) suspension period: JGBs(Book-entry) P/D- 3 business days JGBs(Registered) P/D- 8 business days Corporate bonds(Registered) P/D-22 calendar days Municipal bonds(Registered) P/D-22 calendar days Convertible bonds(Book-entry) P/D- 2 business days

For registered bonds, the owner of the bonds must re-register the securities before the suspension period. Interest on physical bonds are payable upon presentation of the coupons/certificates at the paying agent by one business day prior to the payment date. Tax: Income tax is withheld from interest amount at source. The statutory rate is 15% and the mitigated rate under the tax treaty is 10% in most cases. 5% Local tax is additionally imposed on residents. Interest on book-entry JGBs owned by non-residents through a Qualified Foreign Intermediary (QFI) can be exempt from the withholding tax in proportion to their holding period. (Aggregation of holding period is possible if the former holder has tax exempt status as well.) Procedures for application of double taxation treaties: BTM as custodian sends the application form for the reduced income tax rate to the issuer who in turn submits it to the local tax office prior to the payment date(please see below). New double taxation treaty between Japan and the United States: Under the new double taxation treaty between Japan and the United States implemented on 1 July 2004, the most common tax rate on interest remained unchanged at 10%, whereas new benefits were added including a tax exemption for pension funds and financial institutions. It is to be noted that all applicants of the new Japan-US tax treaty (not only tax exempt investors but also those applying for 10% tax rate) must submit documents on eligibility to the tax office, which include a certificate of residency (Form6166).



6

Chronology: Model schedule of Interest Payment

Key dates Example Note BTM Pre-advice of interest payment 25 Aug 2003 BTM offers choices of the

timing for sending MT564.

MT564 (INTR)

Confirmation of Interest Payment

30 Sep 2003 On the day when the net interest amount is credited.

MT566



7

3. Redemption Redemption is a repayment of principal in such investments as bonds, notes, bills or other fixed income instruments. Entitlement: Please refer to the “2. Interest Payment”. Chronology: Model schedule of Redemption

Key dates Example Note BTM Pre-advice of interest payment 25 Aug 2003 BTM offers choices of the

timing for sending MT564

MT564 (REDM*)

Confirmation of Interest Payment

30 Sep 2003 On the day when the redemption amount is credited.

MT566

*MCAL to be used for early redemption and DRAW for redemption by drawing



8

4. Bonus Issue Bonus Issue refers to a free distribution of additional shares by the issuer to the shareholders in proportion to their holdings. The new shares are issued by appropriating the excessive amount of capital over the par value* or with the capitalization by means of transferring the legal reserves. When the capitalization is conducted by using the earnings available for dividend, the issuance of new shares is called Stock Dividend, which is rare in Japan. In any of these events there is no change in the shareholder’s equity.

*Legally, the notion of “par value ” for shares was abolished in 2001. As the above events are the same in the sense that new shares are issued for free, the Commercial Code, in its revision in 1991, regarded all the above events as “Stock Split” focusing on this common aspect of the events. This is the reason the term “Stock Split” is used for both bonus issues and the simple stock splits. In practice, however, issuing companies often announce their stock splits as “Stock Split-Bonus(Gratis) Issue” instead of just indicating the event as “Stock Split”. Bank of Tokyo-Mitsubishi uses the event code BONU in the MT564 notifying Bonus Issues in order to properly reflect the difference from Stock Split (SPLF) in the way the shareholder’s holding balance is affected; Bonus Issue (BONU): New shares are added to the shareholders assets. (Example: 1

new share is allotted per one share). The new shares are often tradable in the market with certain conditions as “When Issued Trade”.

Stock Split (SPLF): New shares are given in exchange for the original shares. (Example: 1 original share is exchanged to 5 new shares)

Entitlement: Eligibility for the entitlement is fixed on the record date. The owner of the shares must re-register the securities prior to the record date. For shares held in JASDEC, the Beneficial Shareholders List will be compiled by the custodian based on the balance of holdings as of the record date. It is the market practice to process all entitlements on an actual settlement basis. Accordingly, in case of a settlement failure over the record date, the claim is to be dealt with between the trade counterparties.



9

Chronology: Model schedule of Bonus Issue

Key dates Example Note BTM Board Meeting/ Announcement

4 March 2003 By 2 weeks before R/D MT564 (BONU)

(When issued trade period) 26 March 2003 – 21 May 2003 (S/D 26 May 2003)

"When issued trade” is set up for the new shares. (normally when the ratio of additional shares per existing share is 0.5 and more) These transactions shall be made during the period from the ex-date until the date designated by the stock exchange, occurring on and after the issuance of stock certificates.

Record Date 31 March 2003 Entitlement is fixed MT564 [MT566*]

Effective Date/ Securities Payable Date

20 May 2003 (Shares in JASDEC) New shares are credited (Physical shares) Received 2-3 days later

MT566 [MT508*]

+ MT564 (PARI)

Pari Passu Date (Assimilation)

27 May 2003 New shares become identical with the underlying shares.

MT566

* These MTs are used based on the client’s request. Instead of MT564 (notice of entitlement), MT566 is sent on the record date as the confirmation of the credit of new shares, which are not available yet. MT508 follows on the effective dates to notify that the new shares have become available. (Physical shares become available 2-5 days later).



10

5. Stock Split Stock Split is an increase in the number of the outstanding shares without the total capitalization of the company. Please also see “4.Bonus Issue”. Chronology: Model schedule of Stock Split


25 March 2003 By 2 weeks before R/D MT564 (SPLF)

Notification of submission of the Share Certificates

2 weeks before Effective Date

Applicable to physical shares

MT599

Share Certificates Submission Date

31 July 2003 Applicable to physical shares

Record Date 31 July 2003 Effective Date/Securities Payable Date

1 August 2003 (Shares in JASDEC) New shares are credited and old shares are debited (Physical shares) Received 2-3 days later

MT566



11

6. Rights Issue Rights Issue refers to allotment of the rights to the shareholders by the issuer in proportion to their holdings. With the rights, shareholders are entitled to buy additional shares of the company at a certain price. The rights and the new shares are often tradable in the market. The options available for the shareholders are: to exercise the rights and purchase the additional shares, to sell the rights in the market (subject to the market condition), or to take no action. The rights become worthless after the exercise period. Entitlement: Eligibility for the entitlement is fixed on the record date. The owner of the shares must re-register the securities prior to the record date. For shares held in JASDEC, a Beneficial Shareholders List will be compiled by the custodian based on the balance of holdings as of the record date. It is the market practice to process all entitlements on an actual settlement basis. Chronology: Model schedule of rights issue


29 May 2003 By 2 weeks before R/D MT564 (RHTS)

(When issued trade period for the subscription rights)

26 Aug 2003 – 10 Oct 2003 (S/D 16 Oct 2003)

For sale, rights must be exchanged for the negotiable certificates

(When issued trade period for the new shares)

26 Aug 2003 – 10 Nov 2003 (S/D 13 Nov 2003)

"When issued trade” is set up for the new shares. These transactions shall be made during the period from the ex-date until the date designated by the stock exchange.

Record Date 31 Aug 2003 Entitlement is fixed and Rights are credited

MT564 +

MT566 Subscription Period 9 Oct 2003 –

23 Oct 2003



12

1. Exercise of subscription rights Exercise of Rights Subscription money is

debited and the Rights are debited. New shares are credited but not available yet.

MT566

Securities Payable Date 7 Nov 2003

(Shares in JASDEC) New shares become available. (Physical shares) Delivered 2-5 days later

MT508 +

MT564 (PARI)

Pari Passu Date (Assimilation)

14 Nov 2003

New shares become identical with the underlying shares. Pari Passu Date is commonly the next date of the S/D of the new shares’ When Issued trade.

MT566

2. Sale of subscription rights Settlement Date of the W/I trade of rights

16 Oct 2003 Rights are debited and the proceeds are credited.

MT566

3. No Action End of the subscription period

23 Oct 2003 Subscription Rights are expired.

MT566



13

7. Allotment of New Share Subscription Rights The New Share Subscription Rights (hereinafter “NSSR”) were brought into the market with the revision of the Commercial Code in 2001. NSSRs are allotted to the shareholders by the issuer in proportion to their holdings, either for free or against payment depending on each case. In either of the case, the shareholders who would like to take the allotment are required to submit an application form to the issuer or its agent. The rights entitle the holders to purchase the shares of the company at a certain price. The length of the exercise period varies and, as have been observed in the market, ranges from one to three years. Transfer of NSSRs are restricted by the issuer in most cases and accordingly the rights are not tradable in the market. There are often exercise conditions set on the NSSRs. For example, the holder is entitled to exercise the rights just once and no partial exercise is allowed, which may cause a problem with the rights held in an omnibus account of the nominee. The issuers usually offer a solution to secure the exercise opportunity for each beneficial owner under the nominal shareholder, though only after contacted individually by the nominal shareholders/ custodians. BTM proactively obtain the information and notify to the clients. Note: As illustrated below, the event codes RHDI* and EXRI* are used to indicate the 1st event and the 2nd event respectively. The use of these codes reflects the discussion at the national market practice group of Japan held through 2003. *Alternately RHTS and EXWA may also be used, though RHDI should be preferable in order to

discriminate this event from the Rights Issue (please see 6). 1st Event - Allotment of NSSRs from issuer to shareholders - RHDI 2nd Event - Exercise of the NSSRs by the holders- EXRI

Entitlement: Eligibility for the entitlement is fixed on the record date. The owner of the shares must re-register the securities prior to the record date. For shares held in JASDEC, the Beneficial Shareholders List will be compiled by the custodian based on the balance of holdings as of the record date. It is the market practice to process all entitlements on an actual settlement basis.



14

Chronology (1): Model schedule of NSSR (received for free)

Key dates Example Note BTM 1st Event Board Meeting/ Announcement 31 Jan 2003 By 2 weeks before R/D MT564

(RHDI) Notification of exercise conditions

7 Feb 2003 Exercise price of the subscription rights is announced

MT564

Record Date 28 Feb 2003 Entitlement is fixed

MT564

Issuer sends the application form to the shareholders as of R/D

31 Mar 2003

Application Period 3 April 2003 – 25 April 2003

The subscription rights are free but the application must be submitted to the issuer

Issuer sends the “notice of allotment” and the “application form for exercising the rights” to the shareholders

30 May 2003 Upon receipt of the “notice of allotment” from the issuer, the new share subscription rights are credited

MT566

2nd Event Exercise Period 2 Jun 2003 –

31 Mar 2006 Notified as the new event (EXRI)

MT564 (EXRI)

The rights and the subscription money are debited

MT566 Exercise of the rights

The new shares are credited upon receipt from the issuer

MT566



15

Chronology (2): Model schedule of NSSR (received against payment)

Key dates Example Note BTM 1st Event Board Meeting/ Announcement 10 Jan 2003 By 2 weeks before R/D MT564

(RHDI)

Notification of exercise conditions

23 Jan 2003 Exercise price of the subscription rights is announced

MT564

Record Date 31 Jan 2003 Entitlement is fixed

MT564

Issuer sends the application form to the shareholders as of R/D

5 Mar 2003

Application Period 7 Mar 2003 – 20 Mar 2003

The application money is debited

MT566

Issuer sends the “notice of allotment” and the “application form for exercising the rights” to the shareholders

2 Jun 2003 Upon receipt of the “notice of allotment” from the issuer, the new share subscription rights are credited

MT566

2nd Event Exercise Period 2 Jul 2003 –

30 Jun 2006 Notified as the new event(EXRI)

MT564 (EXRI)

The rights and the subscription money are debited

MT566 Exercise of the rights

The new shares are credited upon receipt from the issuer

MT566



16

8. Merger/Share Transfer/Share Exchange Merger: Merger, for which the event code of MRGR is used, is a type of integration of two or more companies where the shareholders of the dissolving company(ies) are to receive the shares of the surviving company. The merger requires approval by special resolution at the shareholders meeting of all the companies involved with the exception for the surviving company absorbing small company(ies) in accordance with the criteria provided for in the commercial code. The balance of dissolving company’s shares that are subject to the merger is fixed one day prior to the effective date(=merger date), which is notified as the record date. In some cases surviving companies pay a merger subsidy to the shareholders of the dissolving company(ies) in order to compensate for the dividend or in relation to the merger ratio. The merger subsidy is paid by the company mostly in the same way as that for dividends and notified by BTM with the event code DVCA. Confirmation of Merger: Confirmation of the new balance (MT566) is sent to the shareholders of the dissolving company on the effective date, where the ISIN still remains unchanged. On the following day, another confirmation is sent under the ISIN of the surviving company. This reflects the timing of notice provided by JASDEC in consideration that the merger becomes effective after it is actually registered at sometime on the effective date. The same applies to Share Transfer. Share Transfer & Share Exchange: These two events, which are other forms of company integration, are also notified by BTM with the event code MRGR. Approval by special resolution at the shareholders meeting is required in principle for both acquiring and acquired companies.

Share Transfer: Shares of the acquired company are transferred to the newly established parent company. The parent company’s shares are given to the shareholders of the acquired company.

Share Exchange: Shares of the acquiring company will be given in exchange for the shares of the acquired company. As the result, the acquiring company becomes the wholly owning parent company. The special resolution at the shareholders meeting of the acquiring company is not necessary in acquiring small company(ies) in accordance with the criteria provided for in the commercial code.



17

Chronology : Model schedule of Merger

Key dates Example Note BTM Board Meeting/ Announcement 30 Apr 2003 MT564

(MRGR) Additional Information e.g. merger subsidy

MT564

Shareholders Meeting 27 Jun 2003 Approval by special resolution

Record Date 30 Sep 2003 Confirmation of the new balance is dispatched by MT566 with the ISIN unchanged. The merger becomes effective after legally registered (normally on this day).

MT566 Effective Date 1 Oct 2003

The merger becomes legally effective after being registered (normally on this day).

The day following the effective date

2 Oct 2003 Completion of the merger is confirmed by MT566 where the change of ISIN into that of the surviving company is notified.

MT566

Chronology : Model schedule of Share Transfer

Key dates Example Note BTM Board Meeting/ Announcement 8 Oct 2003 MT564


MT564

Shareholders Meeting 18 Dec 2003 Approval by special resolution

Record Date 31 Mar 2004



18

Confirmation of the new balance is dispatched by MT566 with the ISIN unchanged. The merger becomes effective after legally registered (normally on this day).

MT566 Effective Date 1 Apr 200４

The merger becomes legally effective after being registered (normally on this day).

The day following the effective date

2 Apr 2004 Completion of the merger is confirmed by MT566 where the change of ISIN into that of the parent company is notified.

MT566

Chronology : Model schedule of Share Exchange

Key dates Example Note BTM Board Meeting/ Announcement 27 Oct 2003 MT564


MT564

Shareholders Meeting 25 Dec 2003 Approval by special resolution

Record Date 9 Feb 2004 Effective Date 10 Feb 2004 Confirmation of the new

balance is dispatched by MT566 with the ISIN of the parent company.

MT566



19

9. Tender Offers (Take Over Bid & Buyback Offer) Take Over Bid/Buyback Offer are an offer made by a company (offror) to shareholders, requesting to sell their shares at a certain price outside the market.

Take Over Bid: The offeor (purchaser) is a third party company whose objective is to take control of the target company. Offers are mostly friendly ones in relation to business reorganization but there may also be hostile takeovers.

Buyback Offer: The offeor (purchaser) is the issuing company whose objective is mainly to reduce the number of outstanding shares. According to the revision of the commercial code enacted in September 2003, the companies are allowed to buy back shares only with the resolution at the board meeting and the approval at the shareholders meeting is not required, provided that their articles of incorporation have been revised accordingly. This change may lead to an increase in the number of the buyback offers. Procedures for Subscription: Subscription is accepted and processed by a securities company who acts as tender offer agent. It is necessary to open an account with the offer agent for each of the subscribing client’s custody account with BTM, unless such accounts are already opened with the agent. This account opening is a part of the procedures for subscription and BTM clients do not have to send a separate instruction to open the account in addition to the instruction for the subscription. Identification Document: Based on the law on customer identification which came into effect on 6 January 2003, your identification document is required by the tender offer agent when you open an account with the agent for the first time. This means you do not have to send us such document if the tender offer agent has already hold an account for one of your custody account with BTM. Please note that the identification document is required at global custodians level, not at the underlying beneficiaries level. The identification document should be an “official” document (e.g. Registration of Incorporation) where the name and the address of the BTM client are indicated and should not be older than six months from the date of issuance. Restrictions: Tender offers often impose restrictions on the subscription in terms of the US regulations. Details of the restriction announced by the offeror are informed by MT568 sent by BTM following MT564. BTM clients are requested to confirm in their



20

instruction that the participation is not in violation with the restrictions. Tax: When a buyback price is higher than the issuer's capital (including the capital reserve) per share, the difference is regarded as payment of dividend (=deemed dividend) and the tax is withheld accordingly at the prevailing tax rate (a treaty tax rate is applicable). The net purchase price is lower than the offer price by the tax amount.

Example: Capital per share : JPY60.99799467 -------- (a)

Deemed dividend per share : JPY1,639.00200533 ----(b)

Tax amount per share: (b) x 10% = JPY163.90020053 ---(c)

Offer price announced.: JPY1,700 ---(d)

Actual repurchase price per share : (d) – ( c) = JPY1,536.099799467 Chronology: Model schedule of Take Over Bid/Buyback Offer


19 Aug 2003 TEND - Take Over Bid BIDS - Buyback Offer Details are notified by MT568 linked to MT564.

MT564 +

MT568 (TEND/ BIDS)

Subscription Period 19 Aug 2003 – 8 Sep 2003

Subscription period is 20-60 days starting on the day of the announcement.

The following day of the subscription end date

9 Sep 2003 Notification of the acceptance of subscription. In case of over subscription, the acceptance is on pro-rata base if the maximum number of purchase has been set.

MT599

Settlement Date 16 Sep 2003 The settlement amount is credited normally around 5 business days after the end of the Subscription Period. Confirmation for completion of the TOB/Buyback Offer is sent.

MT566



21

10. Proxy Voting (Bank of Tokyo-Mitsubishi provides the clients with proxy voting services (including both notification of the agenda of shareholders’ meetings and voting) on request basis. If you need the proxy voting services but do not currently receive them, please contact the BTM Marketing & Customer Relations division.) Shareholders’ meetings: Japanese companies are legally obliged to hold a general shareholders’ meeting within three months after the fiscal year end. About eighty percent of the listed companies have the fiscal closing on the end of March, and most of them have the annual shareholders’ meeting on a day close to the last business day of June. Accordingly, the proxy voting activities in Japan have by far the busiest peak season in June. In addition to the annual general meetings, extraordinary shareholders’ meetings are held as the occasion arises. Entitlement: Eligibility for voting rights is fixed on the record date. The record date for the voting rights at the annual general meeting is normally the same as the fiscal year end. In order to exercise the voting rights, the owner of the shares must re-register the shares prior to the record date. For shares held in JASDEC, the Beneficial Shareholders List will be compiled by the custodian based on the balance of holdings as of the record date. As regards companies that have adopted the unit share system, one voting right is allotted per unit of shares. No voting right is given to odd lot shares. Split Voting: When a registered shareholder is going to vote in split, the shareholder must submit the prior written notice to the company no later than three days before the shareholders’ meeting in compliance with the Commercial Code. BTM arranges to send this prior notice to all companies in order to accommodate the possible split voting by the clients. Voting process:

- The company dispatches the notice of the shareholders’ meeting with the agenda to each of the registered shareholders (to the local custodian bank, when the shareholder is non- resident) by two weeks before the shareholders meeting. The notice is accompanied by one voting card.

- BTM notifies the agenda items to the clients.



22

- BTM fills out the voting cards according to the voting instructions received

from the clients. - BTM sends out the completed voting cards by mail so that the cards are

delivered to the company by the day before the meeting date. Notice of Resolutions: The outcome of the votes in the AGMs held in June peak season is available on BTM Website. Chronology: Model schedule of proxy voting (in the peak season)

Key dates Example Note Record Date 31 Mar 2004

Early May 2004

BTM contacts registrars (agents of issuers) to arrange for the way to receive AGM notices in order to save the mail delivery time.

Around the end of May 2004

BTM sends “Voting Rights Statement” to Clients. This is the form the clients can use for voting instructions.

via courier

Around the end of May 2004

In order to enable the clients to vote in split, BTM sends in advance a legally required pre-notice to each company via the registrars.

By two weeks before the meeting date

BTM receives notices of the shareholders’ meeting. BTM notifies the agenda items to the clients.

Fax e-mail

After BTM deadline

BTM fills out voting cards according to the clients’ instructions and mail the cards to the registrars.

Shareholders’ meeting date

24 Jun 2004 – 29 Jun 2004

(90% of the companies with March fiscal year end had AGMs in this period)



23

11. [Appendix] Simplified Merger / Simplified Share Exchange Corporate action notifications on mergers are normally provided only to the clients who are the shareholders of the dissolving company. The merger notifications are not sent to the shareholders of the surviving company because the balance of shares held by these shareholders will not be affected by the event. With regard to “simplified mergers”, however, BTM provides the notifications to the shareholders of the surviving company on request basis (by MT599). Below are the explanations on the simplified merger that aim to help our clients consider if they need such notifications.

(1) Outline of Simplified Merger “Simplified merger” is a type of merger provided for in the Japanese commercial code. Defined as a merger where a company acquires a much smaller company (the number of the newly issued shares of the surviving company is not more than 5% of the outstanding shares), the simplified merger does not need the approval by the shareholders meeting of the surviving company. Instead, the law requires the surviving company to notify the scheduled simplified merger to the shareholders. This notification is often made by a public announcement in the newspaper where the surviving company notices that any objection to the merger by the shareholders should be informed to the company by 2 weeks from the announcement date. Those shareholders who have notified the opposition have the right (but not the obligation) to require the company to buyback the shares. Should one-sixth of the shareholders of the surviving company represent the opposition to the merger, it is not possible to conduct the merger by means of the simplified merger process.

(2) Points to be noted by the shareholders of a surviving company (i) The shareholders of a surviving company are not requested to take any

action by law or by the company. In this respect, the shareholders should be careful about the notification of simplified mergers because there are information providers who notify the simplified mergers improperly as the corporate action event of “Consent Solicitation” (using CONS in swift messages). This is apparently incorrect. Under the legislation for the simplified merger process, surviving companies do not have to collect shareholders’ consent to the merger.

(ii) Normally, simplified mergers do not per se have much influence on the shareholders of the surviving company.



24

(iii) There is no established procedures for wielding the shareholders’ rights to

(a)represent the opposition to simplified mergers and (b)sell the shares to the surviving company.

(a) In representing the opposition as the shareholder, the registration requirements vary by company. It is not possible to sell the shares during the registration process.

(b) The buyback price is determined at the discretion of the company. As there is no legislation that specifically stipulates the method to determine the share buyback price, shareholders who are not satisfied with the offered price have nothing to do but to file a lawsuit, which is out of the scope of our custody services.

(3) Other “Simplified” events The above explanations about the simplified merger apply to the “simplified share exchange” (please read “surviving company” in the above explanations as “parent company” and read “dissolving company” as “subsidiary”) and also to the following simplified events:

- Simplified Spin-off and Acquisition - Simplified Acquisition of Business

global securities services division corporate actions · 2020-01-28 · the bank of...

Documents